Obamacare challenge: Convincing the uninsured insurance is worth the price

Elly Banos was so eager to get health insurance that she tried to sign up Oct. 1, the first day it was possible to enroll in coverage made available through the health law commonly called Obamacare.

Technical glitches delayed the process. But when Banos finally managed to apply for coverage through the call center for the state’s new insurance marketplace, she found a bigger problem: The cheapest option she was told she’d qualify for costs $263 per month.

“That’s too much for me. I can’t afford that,” said Banos, 48, who works part-time as a cashier at Lowe’s.

As officials and community groups try to get many of Connecticut’s nearly 350,000 uninsured residents covered, one significant challenge is likely to be convincing those like Banos that the price of insurance — even if it looks inexpensive to those currently paying for coverage — is worth it.

Obamacare aims to expand insurance coverage in part by using federal funds to discount the premiums many people pay for coverage. Officials including President Obama have promoted the idea that for some people, the discounts will mean that insurance costs will more closely resemble a monthly cellphone bill than a mortgage.

But for some people who are uninsured, even discounted premiums can look like too much to fit into a tight budget. And that can mean weighing whether to take on another monthly bill or paying a one-time penalty — $95 or 1 percent of household income next year, and more after that — for foregoing coverage.

“It’s expensive,” is a common reaction among clients considering their options, said Myrian Garcia, a patient navigator at First Choice Health Centers in East Hartford. She’s a certified application counselor who helps people learn about their options and sign up. For many, the premiums would cost $160 to $200 per month.

Many work part-time and earn too much to qualify for Medicaid. Garcia said they’re considering whether to pay the penalty for not having insurance or pay for insurance and figure out a way to prioritize their other bills — “food, clothes, uniforms, car payments, car insurance, lights, heat.”

“It’s going to be a challenging journey for a lot of our clients and patients who don’t have insurance,” she said. “It puts them in a difficult situation.”

Complaints about price

At Access Health CT, the state’s health insurance exchange, the most common feedback in the early days of enrollment was, “It’s too expensive. I can’t afford it,” chief operating officer Peter Van Loon said.

“Price is the big one, and people don’t like the price, which is kind of what we expected,” Van Loon told a committee of the exchange’s board earlier this month.

Will those unhappy about the prices decide to seek exemptions or pay the penalty? Or will they ultimately decide having insurance is worth it and buy into the system?

“The issue about insurance cost is always a very relevant issue, and a very sensitive issue, and in our state, where we have the fourth highest medical costs in the country, it’s a particularly acute issue,” Access Health CEO Kevin Counihan said.

Counihan said the issue can be broken into two pieces — value and affordability. He can argue that health insurance has value, and that it’s an irrational gamble to go without it and risk getting sick and incurring huge medical bills.

The affordability side is harder. Someone might say, “I know I need to get insurance, and I appreciate these subsidies, but 200 bucks to me is still a lot of money,” Counihan said.

“They’re absolutely right. They’re absolutely right it is a lot of money. This is part of a much broader issue that we have in our state around health care costs,” he added.

In many states, insurance companies have kept the prices of their exchange plans lower by contracting with fewer doctors, hospitals and other health care providers. Connecticut’s exchange limits insurers’ ability to do that, requiring that carriers’ exchange plans have networks that are substantially equal to those used in their other commercial products.

Connecticut’s exchange has among the highest prices in the country. For people receiving subsidies, the discounts are set so they wouldn’t pay more than a certain percentage of their income for a midlevel plan — meaning that the state’s relatively high costs will be more of an issue for people paying full price.

Counihan noted that the health law exempts people from the individual coverage mandate if they would have to pay more than 8 percent of their household income in premiums. People must apply for an exemption.

The real story on costs

Insurance agent John Calkins, president of Bozzuto Associates in Watertown, thinks many people have gotten the wrong impression about what insurance will cost under Obamacare.

“I think that this has been portrayed as the federal government’s going to give you health care,” he said. “What people didn’t read is how much it’s going to cost you” — for both the premium and out-of-pocket costs like deductibles, copayments and coinsurance.

Calkins thinks there will need to be an educational process and a change in mind-set to make people recognize the importance of having insurance — and how to properly value it.

As an example, he noted that a longtime client of his once had her rates rise dramatically. She wondered why it was worth paying $1,700 a month when she never used that much medical care.

“This is not a dollar-for-dollar exchange. That’s not insurance,” he said he told her. “Insurance is for the unforeseen.”

Anybody who’s had a medical scare or needed treatment already appreciates the value of coverage, he said, but those who are young and healthy could take some convincing. And they’re the ones who need to buy into the system for the insurance risk pools to work.

Rethinking household budgets

Ida Colón, senior outreach advocate at the Hispanic Health Council who is helping to lead the effort to get people covered in Hartford County, got a call from a woman who’d looked at her options online and was surprised by the out-of-pocket costs she’d have to face. One plan had a $5,000 deductible. The woman said she’d prefer to pay the penalty.

“The numbers looked overwhelming for her,” Colón said.

She asked the woman concerned about the deductible to think about what would happen if she had a car accident. She said she’d give similar advice to others.

“I know they’re going to say, ‘Well, I don’t have extra money,’” Colón said. “It’s kind of just telling them the importance of insurance.”

And she said she’d suggest ways to trim people’s budgets, like cutting out cable or switching to a less-costly phone plan. Or asking people to think about how they’d prioritize their spending if they lost their job and needed to cut out a certain amount of money.

Banos, the would-be Access Health customer, figures she could afford to pay $150 or $155 per month, but not $263.

When she first browsed the exchange’s website, she was quoted plans that cost as little as $69 per month. But after creating an account and entering information about herself, the cost was higher. She said she checked with the Access Health call center, but was told $263 was her lowest-priced option.

Banos hopes that it’s a glitch and that the lower-priced options she originally saw are available to her.

If not, she said, the law she once thought would help her is a disappointment.

“It’s like, how do you pay rent?” she said. “How do you pay food? How do you pay clothes? How do you pay insurance?”

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Follow The Mirror's coverage of the Affordable Care Act in Connecticut. Find features, explainers and Q&As to better understand how the complex policy changes taking place under Obamacare are supposed to work in theory, and how they're working out in practice.

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